Intermediaries enhancing focus on vulnerable customers during pandemic

IFAs and brokers are enhancing their protection for older customers during the coronavirus crisis, according to new research from Key Partnerships.

The equity release referral service for the adviser, Key, suggested that while almost a third (29%) of companies were confident that their vulnerability policies were robust, some had decided to step them up in the wake of the COVID-19 pandemic.

The research, undertaken among 242 brokers and IFAs who refer equity release customers to Key Partnerships, also indicated that one in three mortgage intermediaries (34%) and wealth managers (33%) have reviewed or increased the checks they make on older customers to ensure they are not vulnerable.

The FCA defines a vulnerable customer as “someone who, due to their personal circumstances, is especially susceptible to detriment, particularly when a firm is not acting with appropriate levels of care”.

Key Partnerships also stated that one in four (26%) mortgage advisers and one in five wealth managers (22%) are treating all customers during the pandemic as potentially vulnerable.  Furthermore, 11% of those surveyed said that people who wanted to use equity release for “immediate needs” during the crisis were under pressure and more likely to be vulnerable.

Key Partnerships business development director, Jason Ruse, commented: “Advisers have proved to be resilient and adaptable throughout the crisis despite the challenges of changing working practices and the financial impact on businesses. Vulnerability was a hot topic before the crisis hit and it is good to see that this remains at the forefront of people’s minds and we reviewed our vulnerability policy for added due diligence in the current times.

“While not all older customers are vulnerable, they are an age group which is more likely to be vulnerable and self-isolation as well as the impact of the coronavirus on pensions and savings is likely to have seen more people considering their options.

“The focus on ensuring vulnerability is addressed is particularly important and the numbers of firms which have taken action or reviewed practices to ensure they are supporting clients underlines how important the issue is.”

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